Brokers in the office property sector are struggling amid declining sales.
According to FNB’s latest Commercial Property Broker Survey, the percentage of respondents who said that they were experiencing satisfactory conditions dropped from 35% in Q1 2024 to 30% in Q1 2024.
“While we had previously thought it possible that the SARB’s shift in monetary policy direction from interest rate hiking up until May 2023 (475 basis points increases from late in 2021) to sideways movement thereafter could lift property investor confidence mildly, this did not appear to materialize,” said FNB.
“It is possible that there is some lagged negative impact still feeding into the market from those earlier rate hikes.”
The bank also said that the late May 2024 general election, which took place shortly after the survey, resulted in many property investors taking a wait-and-see approach.
That said, brokers in the Industrial and Warehouse Property market were optimistic.
When ratin’ activity levels on a scale of 1 to 10, the Industrial and Warehouse Property Market declined from 5.59 in Q1 to 5.27 in Q2 – the rating is now far lower than the 6.35 multi-year high reached in the final quarter of 2022.
The Retail Property Activity Rating rose very slightly from 4.41 in the 2nd quarter of 2024, up from 4.36 in the previous quarter, but still well down from its multi-year high of 4.9, reached at the end of 2023.
The Office Property Market Activity Rating remained perceived as the weakest of the three markets, dropping from 3.71 in Q1 to 3.54 in Q2 2024.
This is well down on its multi-year high of 4.29 recorded in the third and fourth quarters of 2023.
On a metro level, activity levels in Cape Town were far higher than in other cities in the country.
Cape Town scored 5.13, followed by Nelson Mandela Bay’s 5.00.
However, Tshwane and Johannesburg’s office ratings stood at 3.19 and 3.15, respectively.
This is reflective of a Gauteng region that is perceived as weaker than other major coastal areas.
| City | Office Activity Levels |
| Cape Town | 5.13 |
| Nelson Mandela Bay | 5.00 |
| South Africa | 3.63 |
| Ethekwini | 3.37 |
| Tshwane | 3.19 |
| Joburg | 3.15 |
The survey also asks if activity levels increased or decreased during the six months before the survey date.
On a scale of -100 to 100, the broker aggregated perceptions showed a clear direction in the overall commercial property Market’s sales activity compared to six months prior.
The Office Index reading stood at zero (unchanged activity from 6 months prior).
The retail index was slightly positive, at +2.17 (slightly higher activity than six months prior), while the Industrial Index was negative, at -13.63 (lower activity compared to six months prior).
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